Journal Article

Accounting for cross-country differences in income per capita

Abstract: Living standards, as measured by average income per person, vary widely across countries. Differences in income result in large disparities in spending on goods and services by people living in different economies. What makes some countries rich and others poor? Furthermore, what determines income per person in a country, and why are these factors unevenly allocated across the world? In \\"Accounting for Cross-Country Differences in Income Per Capita,\\" Aubhik Khan outlines a framework for growth accounting to account for cross-country differences in income. The current consensus is that differences in per capita income across countries don't arise primarily from differences in the quantities of capital or labor, but rather from differences in the efficiency with which these factors are used.

Keywords: Income; Income distribution; Productivity;

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Business Review

Publication Date: 2009

Issue: Q1

Pages: 11-18